Is Paper From Facebook To Be Tossed?

With only 119,000 monthly users(1) and 12 seconds of usage per user each month, Paper application gives us a lot to learn.

On January 30th, 2014 a day after sharing its amazing 2013 earnings, Facebook introduced a new application named Paper. With an awesome design, strongly inspired by news aggregators, such as Flipboard, Paper offers personalized news stories as well as Facebook News Feed updates in the same app. The launch was well organized with a beautiful video and well executed tutorial. It was a powerful demonstration of the expertise of the Push Pop Press team acquired by Facebook in July 2011.

Paper gets tossed anyway.

Despite its successful launch, powered by Facebook’s brand recognition, the application has no traction in terms of user and usage.

As you can see on App Annie (2) below, the ranking, which is mainly defined by number of downloads, dropped significantly below the top 1500 apps in the US App Store. In 3 months the application fell from the 2nd place to below 1500th place. In the social category of the App Store, Paper is no longer in the top 100 of his category. For an application powered by Facebook, it is a clear disappointment.

Assuming Comscore data is correct, the most concerning point is the lack of retention. With a humble start of 197,000 monthly unique visitors in the US, only 119,000 unique visitors are still active three months later. Daily usage is even worse. After a pick at 40,000 daily active users in March, Paper has only 7,000 daily active users in April, only 5,88% of the active base! As a comparison, Facebook application has 115 million unique visitors, 40 million daily unique visitors (35% of the installed base), and spending on average 900 minutes per month.

The situation is extremely concerning in light of usage as well: the number of total cumulated seconds spent per month and per user was at a ridiculously low 12 seconds for February, and 18 seconds in March! Facebook declared during the last conference that the average user “explores 80 stories a day”. Either they are a very small cohort of users, or the fastest readers of the world.

What does this teach us?

So Paper is a flop, with zero impact on company rollout, but what can we learn from it? The case is very interesting as the application is awesome, supported by a beautiful brand, launched with a good marketing (www.facebook.com/paper) strategy and positive press coverage. The Verge named it the best Facebook app ever. More than that, it is a big move from Facebook to extend its activity to the news field. It’s an application as well as a major strategic move.

There is no doubt that the application is a beautiful one, with a “wow”-effect, and well rated by the user. Below is the rating on Appstore in US of the news aggregators for May.

- Positioning: Paper is described as an app to “explore and share stories from friends and the world.” The wording suggests that it’s trying be both a news aggregator and a social feed. By being in the middle of both, it doesn’t do either well.

- Features: Paper is not a full news aggregator, as you cannot personalize your content based on the subject you like, which is a basic functionality of any news aggregator. Paper chooses to ignore the long-tail theory, demonstrating that headlines news represents only 20% of what users want to follow(3). Instead, Paper is closer to a vertical news application, such as the New York Times or USA Today as it offers high-standard curation on a series of limited subjects. In that case, users are expecting some key features, such as push notifications, which aren’t yet available. As for the News Feed, the Facebook application is very utilitarian (as is Google). The pleasure or ego effect comes from the interaction or content provided by your friends. The app doesn’t add a beautiful layer to the information, missing a crucial value-add To add a beautiful layer on top is not bringing neither emotional or neither rational added value for the end user. Josh Constine from Techcrunch said it best in his article about Paper: “For some, it will feel over-designed and overwhelming. Too unfamiliar. Too new. And they’ll keep using Facebook for iOS.” (4). Humans are animals full of habits; to have them change, they need to have a big incentive. Especially if you take into consideration that user is launching 9 to 12 applications per month.

- Brand: Paper brand is a reference to newspaper, and as shared above, it is not answering to its promise. Paper’s user interface is also not aligned with Facebook’s brand positioning as a social utility. Compared to brands such as Apple, Coke or Nike, the inspirational dimension of the brand is low. The elegant Paper app is not in harmony with the utilitarian user interface of Facebook main application.

As other big players such as Google, Yahoo, Twitter, Facebook is trying hard to step into the news business, as confirmed by FB Newswire’s recent launch. Launching an app, beautiful but not well positioned in terms of brand and features, was a high-risk move. The remaining question is now what will be Facebook’s next move: give up the field, improve Paper significantly, or buy a news aggregator?

I have to concur with this. I started using paper exclusively for a while, even uninstalling the main app. However, I had to reinstall the main app again when I realized Facebook Paper’s feature-set is so limited. You can’t easily get to events, for example, which is probably 25% of what I use facebook for.

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Who is this guy?

Gilles is the CEO & Founder of News Republic, publisher of news application for smartphones, tablets, and TV. Federating more than 1,000 publishers worldwide such as Reuters, Associated Press, The Independent, CNN International, Al Jazeera, and Gizmodo …Read More

Why My Thoughts on it?

Running a media company, working directly with more than 1,000 news publishers from regions all over the world, having lived and worked on three continents, after three start ups and 20 years of experience in digital content and mobile technology, many success and mistakes, and wrong interpretations…Read More

On the settee…

Back in the nineties, Cyril started his career as an architect of embedded software. At the turn of the millennium, he created Alcatel’s first WiFi product line in partnership with the Israeli startup Alvarion. He filed three patents in the digital modulation domain.
After an MBA at INSEAD in 2001, he started a new life as an early stage investor, first for a Silicon Valley VC fund (Telesoft Partners), which taught him the underpinnings of the Venture world, and then for a German VC fund (Munich-based DVCG), where he focused on software and mobility. He joined XAnge in Paris in 2007 as a Partner and member of the Executive Committee.
Cyril holds a Masters’ degree in Engineering from Telecom Paris Tech as well as an MBA from INSEAD.
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